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Challenge 48 in the series 50 Reasons Why It Is Hard to Run a Nonprofit
A youth services nonprofit receives a major foundation grant to implement a new evidence-based curriculum. The foundation wants fidelity to the model — deliver the program exactly as designed, with standardized assessments and quarterly reporting.
The families in the program want flexibility. Their kids have different needs, different schedules, different levels of readiness. The staff want to adapt the curriculum because they see what works and what doesn't in real time. The board wants the grant money because the organization needs it to survive.
The funder, the families, the staff, and the board all have legitimate claims. They can't all be satisfied simultaneously. And the executive director has to decide.
In a for-profit business, the customer question has a clear answer: the customer is the person who pays. Their satisfaction drives revenue, and revenue drives decisions.
In a nonprofit, there is no single customer. The people you serve usually aren't the people who pay. The people who pay have their own priorities, which may or may not align with what your service population actually needs. The board has fiduciary duties that sometimes conflict with programmatic decisions. Staff have professional judgment that sometimes conflicts with funder requirements.
The reason I pose this question in Managing Your Nonprofit for Resilience is that it surfaces problems disguised as other things. Mission drift that's actually funder drift — you changed your programs not because the community needed something different, but because a funder offered money for something different. Board conflicts that are actually stakeholder conflicts — board members representing different constituencies pulling the organization in incompatible directions. Staff frustration that's actually an accountability failure — people don't know whose priorities they're supposed to serve.
Most nonprofits have never made the hierarchy of accountability explicit. When you haven't decided in advance whose needs come first, every decision becomes a negotiation — and the stakeholder with the most power (usually the funder) wins by default.
The answer should be clear: the people you exist to help come first. Not the funder. Not the board. Not the ED's vision. The people.
That sounds obvious. In practice, it requires courage — the courage to make decisions that put service population needs ahead of funder preferences, and to communicate those decisions clearly enough that funders understand and respect them.
Start by writing it down. Create a one-paragraph accountability statement that names your primary stakeholder and explains how decisions get made when interests conflict. "When funder requirements conflict with participant needs, we prioritize participant needs and communicate the conflict to the funder." This isn't a legal document. It's a decision-making compass.
Then use it when it matters. The accountability statement is worthless if it lives in a binder. It should show up in staff orientation, board discussions, and funder negotiations. When a program decision comes down to "the funder wants X but the participants need Y," the team should know the answer before the question is asked.
Negotiate with funders early. Most funders are more flexible than nonprofits assume — especially when the conversation happens at the grant design stage. "We've found that our population responds better to an adapted version of this curriculum, and here's the data" is a conversation most program officers welcome.
Protect staff judgment. Your frontline staff know things your funders don't. When a case manager says the standardized intake process doesn't work for a particular client, that's data. Build organizational processes that let staff judgment inform program design — formally, not just through workarounds.
And report honestly. If a funder-required metric doesn't capture what's actually happening in your program, say so — in your report, with an explanation of what you're measuring instead and why. Funders respect transparency. Making the hard calls about who you serve and how you navigate competing stakeholder demands is core to what I write about in Nonprofit Good News Premium.
At your next leadership team meeting, pose this scenario: "A major funder asks us to change a program element that our staff believe will reduce effectiveness for participants. What do we do?" Listen to the conversation. If your team doesn't have a clear, consistent answer, you need an accountability framework — and building one should be your next project.
This is part of an ongoing series based on the 50 challenges outlined in Appendix 1 of Managing Your Nonprofit for Resilience (Wiley, 2023). Each post names one challenge clearly and offers a practical reframe with steps you can take this week. For deeper coverage of nonprofit strategy, risk, and resilience — including tools you can put to work immediately — check out Nonprofit Good News Premium.